Borgata Sues Phil Ivey, Companion and Card Maker over Alleged Edge-Sorting Scheme
On Tuesday, New Jersey’s Borgata Hotel Casino & Spa filed suit against Phil Ivey, a female companion of Ivey’s, and in a separate but related series of allegations, the card manufacturer Gemaco, over $9.626 million won by Ivey at high-stakes baccarat over the course of four separate visits to the Borgata in 2012.
According to court documents obtained by FlushDraw, Ivey and his female friend, Cheng Yin Sun, allegedly conspired to defraud the Borgata through “edge sorting,” the same card-identification technique at the heart of the lawsuit brought by Ivey against London’s Crockfords Casino. Ivey sued Crockfords in late 2012 after the Genting-owned casino refused to ship approximately $12 million won by Ivey at Crockfords’ punto banco tables. That case is still pending.
The Crockfords case has strong ties to the action brought by the Borgata, and is referenced several times within the federal-court filing. Cheng Yin Sun, the Asian companion of Ivey, was not named publicly in the Crockfords case, but may well be the same person who allegedly assisted Ivey in helping identify the minor card discrepancies, which Ivey later admitted played a role in his Crockfords play.
In its filing, the Borgata alleges that Ivey and Sun engaged in the same sort of edge-sorting, that the pair’s intent was hidden from Borgata officials. and that the alleged activity violated New Jersey gaming and contractual law in several different ways.
Ivey and Sun are alleged by the Borgata to have committed breach of contract, breach of implied contract, breach of implied covenant of good faith and fair dealing, fraudulent inducement, fraud, unjust enrichment, conversion, civil conspiracy and participation in a RICO enterprise. The action also asks for declaratory judgments for rescission based on unilateral mistake (the Borgata being unaware of the full circumstances of the high-stakes action), and for illegality of purpose by Ivey and Sun.
The Borgata seeks the recovery in whole of the $9.626 million won by Ivey, a figure which is attached to each of the allegations. The civil RICO allegation also carries a request for trebled damages, as allowed by law.
Separate counts in the filing seek the same $9.626 million from Gemaco, a prominent Missouri card manufacturer. Also named as a defendant is a “Jane Doe,” a quality-control supervisor at Gemaco whose identity appears known to the Borgata but was not released publicly. The Borgata alleges that the Jane Doe defendant was negligent in approving for use at the Borgata an order for more than 200,000 decks of cards that were allegedly warranteed to be free from defect — pertaining in this case to the minor card-cutting variations that were spotted by Ivey and his companion.
According to the Borgata’s filing, Ivey was playing a variation called “mini baccarat,” which allowed the back of the next card dealt to be visible at the front of the shoe, and thus be identified by Sun, Ivey’s sharp-eyed companion.
The lawsuit and attached appendices, which stretch to nearly 60 pages, contain numerous details amid a rough timeline that purports to show a consistent pattern of activity by Ivey and Sun through his four Borgata visits in 2012, designed to implement the pair’s alleged edge-sorting in a manner very similar to that employed at Crockfords.
Those detailed included a number of special requests that were granted to Ivey in consideration of his ultra-high-rolling status, including the use of a single eight-deck shoe of the full-bleed Gemaco cards, which Ivey was allowed to replace until a shoe was found that he and his companion “liked,” in a superstitious way.
Part of that superstition, according to the lawsuit, involved securing a dealer that spoke Mandarin Chinese, and having Ivey’s companion, Sun, saying “Hao” (Mandarin for “good card”) or “Buhao” (“bad card”) to the dealer, who would rotate the good cards 180 degrees. Ivey also demanded, and was allowed, the use of an automatic card shuffler, which left the orientation of the cards unchanged once they were sorted.
One of the most interesting of the allegations is that the fourth and final visit of Ivey to Borgata occurred around October 7, just as news of his Crockfords lawsuit became public. The Borgata questioned Ivey extensively but allowed him to play, and after running up another multi-million dollar win, the Borgata alleges that Ivey intentionally lost more than $2 million in an attempt to cover up his previous activity.
Here’s the excerpt from the filing detailing those allegations and the arrival of Ivey in October 2012 at the Borgata:
98. On October 7, 2012, Borgata received a media report in which it was reported that a casino in London was withholding approximately £7.3 million in gambling winnings from Ivey.
99. The October 7, 2012 report indicated that the casino, Crockfords, was investigating circumstances surrounding Ivey’s playing Punto Banco, which is essentially the same game as Baccarat.
100. The October 7, 2012 report did not elaborate on what Ivey was accused of doing.
101. Ivey played Baccarat for 18 hours beginning October 7, 2012 and ending October 8, 2012
102. During Ivey’s Baccarat play on October 7-8, 2012, he was ahead by as much as $3.5 million.
103. During Ivey’s Baccarat play on October 7-8, 2012 he eventually purportedly won $824,900.
104. During Ivey’s Baccarat play on October 7-8, 2012, his average bet was $93,800.
105. Upon information and belief, Ivey intentionally lost a portion of his winnings at the end of the October 7-8, 2012 Baccarat session.
The filing includes numerous other allegations, including that Ivey engaged in money laundering by wiring a minimum of $1 million on each of his four visits to and from Mexico. The filing also asserts that the mechanical card shuffler and Sun herself became “gambling devices” as defined under New Jersey gaming statutes, and were used to tip the scales of chance in Ivey’s favor.
The Borgata, in filing the case, calculated that the game’s initial 1.06% house advantage was shifted to a 6.765% advantage in Ivey’s favor, and that Ivey did not bet the maximum until after a shoe with faulty cards had been pre-sorted, so that the top card in the shoe — favorable or unfavorable — could be determined.
We’ll have more from this late-breaking story as further details emerge.